Writers and actors have made headlines for taking their fight to the streets to shake up the status quo in Hollywood after years of staying silent and being kept in the dark. At the heart of their plight that triggered and set everything in motion is the manner in which residuals are handled, especially in today’s streaming culture.
In the creative field, artists do not get the same privilege as working professionals in other industries who earn a fixed monthly salary that they can live off of. Instead, artists are counting on these ongoing residuals or additional payments for the work they have done on a project. Let’s explore the world of entertainment residuals and how it plays a pivotal role in sustaining an artist’s career and livelihood.
A Game of Greed
In the entertainment industry, residuals are vital in compensating artists for their talent and hard work. In a nutshell, these are union-negotiated, industry standard long-term payments made to writers, directors, actors, and creative professionals when their film and TV projects have been syndicated, rebroadcast, or are distributed to various media platforms, streaming, DVD and Blu-ray among others for its continued use or consumption beyond its initial release. It ensures that artists are fairly compensated for the work they have done and contributed in the success of a project domestically and internationally.
The strike has initially focused on residuals because of the prevalence of streaming giants, especially studio executives, who earn billions of dollars yet little to none of the creative professionals who were responsible for creating the project received any compensation from the studios for the continued success of their work on streaming platforms.
Residuals are calculated depending on the union agreements negotiated by labor unions such as Screen Actors Guild (SAG-AFTRA), the Writers Guild of America (WGA), and the Directors Guild of America (DGA) with the studios and production companies. Computing residuals is a complex matter because it is contingent on the percentage of the project’s revenue.
“But residual payments can easily amount to just a few cents. Some actors are sharing their residuals on social media, including Kimiko Glenn of Netflix’s Orange Is The New Black, who made a TikTok video of a statement showing only $27 in total for foreign residuals earned over the decade since the show began.”
When these things come to the surface, it makes you scratch your head wondering how studio executives earn millions and billions of dollars while the ones who created the content that they’re earning from get little to none. It simply just doesn’t add up. Due to the fact that streaming services are not required to disclose viewership numbers, they think that they are able to get away with it. Back in the heyday of DVDs and cable TV, creatives would normally get five-digit residual checks, but now it typically goes from a couple of hundreds down to a few pennies. Streaming residuals are based on the number of subscribers they have instead of the frequency of how many times a film or a show is watched.
“That means that regardless of whether a show is a flop or a cash cow, it makes the same amount in residuals. Writers and actors say that allows studios to profit off of their work without compensating them fairly for the success of a show.”
The bottom line is that creatives deserve to get an equal if not bigger share of the profit, especially if the project they’ve worked on becomes a number one hit.
Unfortunately, the negotiations with the Alliance of Motion Picture and Television Producers (AMPTP) have proven to be highly unproductive as evident in the growing number of creatives flocking to the streets fighting for their rights and a just future for all artists working in entertainment. The unions proposed an increase in the percentage of residuals, which the AMPTP unhesitatingly rejected without a justifiable reason.
What’s the Big Deal About Streaming Residuals?
Here’s the thing – pursuing a career as a creative is not for the faint of heart. You don’t go into this profession thinking you’ll be an overnight success and a millionaire sipping margaritas in your mansion in the Hills. Most creatives need to have a day job in order to sustain themselves and pay the bills while going to auditions or working on their projects when time permits. Jobs in entertainment do not allow artists to live off of their art because of the unjust working conditions and contracts controlled by people at the top who want the entire pie all to themselves.
Therefore, streaming residuals hold significant importance in an artist’s livelihood because it is a source of passive income that helps in sustaining their financial needs while they dedicate their time working on their craft and projects until they get their big break. This underscores the importance of the strike in sparking vital conversations and driving actions aimed at reforming the flawed system running Hollywood for decades.
